Choosing and implementing new ERP software has more to do with your desired business strategy and operational model than specific software solutions.
When evaluating and implementing potential enterprise software, it can be easy to get lost in the technical details, bells and whistles, and functionality. ERP projects are a complex investment, especially if you aren’t working with them every day. I understand that the process can be overwhelming and fraught with unknowns.
Before you start evaluating specific ERP vendors and software solutions, it is important to answer one simple question: are you trying to provide flexibility within your organization, or are you trying to standardize operations? Organizations differ, so it’s important to understand the tradeoffs before going too far down the path of an ERP evaluation and selection.
A few things to keep in mind:
Standardization isn’t a bad thing.
We are currently working with a few different clients who have all been wildly successful largely because they have repeatable processes and deliver predictable, quality products and services. They can consistently meet demand and are great at what they do. The example of the best pizza place in town comes to mind. They make great pizza and everything that goes with it, and they’ve turned pizza-making into an art. But in some cases, there are risks associated with standardization: not being able to keep up as consumer trends change, for instance. Standardized processes and products are easier to automate and often easier to scale, but will they ensure that the future of your organization is stable?
Flexibility isn’t a bad thing, either, but it can be.
Some of our clients, on the other hand, are too standardized. They may have lost business because they did not have the flexibility that their customers craved or demanded. In these cases, such companies may want to edge closer to flexibility than standardization. But this also comes with risks: flexibility can be code for “resistance to change” or “refusal to use standard business processes.” It can also lead to excessive software customization – a common risk of ERP implementations. There is no right answer, so the key is to find the right balance.
Your decision should drive which software best fits your business.
Once you define where on this standardization-flexibility spectrum you fall, you will want to find the software that fits best. Keep in mind that it’s not just what you think – you’ll also want to ensure that the rest of your executive and management team are on the same page. For example, a more standardized model might lead you to be more inclined to migrate to SAP S/4HANA rather than Oracle Cloud. On the other hand, a more flexible model might have you leaning toward Oracle, Microsoft Dynamics 365, or Infor CloudSuite. Of course, there is no “all or nothing” solution and every company will come to a different conclusion, so it’s important to hire an independent, technology-agnostic, and experienced partner like Panorama to help you carefully consider your best options.
Your decision will also drive how you implement the software.
Not only will your decision enable the best software choices, but it will also heavily influence how you implement this software. For example, taking a heavily standardized approach means that you will spend even more time on up-front business process management as well as on organizational change management and training. Alternatively, a more flexible model requires even stronger project governance and controls to ensure that the need for flexibility doesn’t lead to excessive customization or end-user workarounds. In other words, your entire implementation – the plan, your resources, and the decisions you make every day – should ultimately align with your decision.
So, before you move full-steam ahead with your ERP implementation or digital transformation, be sure that you are considering what strategies will ultimately support your brand and growth.